Minneapolis' FirstTech, Apple retailing pioneer, is closing

FirstTech in Uptown Minneapolis celebrated its 35th anniversary in November 2012 as one of the country's top Apple resellers. (Pioneer Press: John Doman)

When Apple first began selling its pioneering personal computers in the late 1970s, its first batch of machines went to Team Electronics in the Twin Cities.

Team Electronics eventually morphed into FirstTech, a Minneapolis tech dealer that has prided itself on being the world's first Apple reseller -- and being symbiotically associated with the Cupertino, Calif.-based personal-technology giant.

Soon, though, FirstTech will be no more.

The independent Uptown purveyor of Macintosh machines and Apple iOS mobile devices said Wednesday it is closing. Its last day is March 29. A going-out-of-business sale begins Thursday.

Staffers got the news from the store owners Wednesday afternoon in what was something of a sucker punch, according to product manager Fred Evans.

"It happened very quickly," he said. "It was very emotional but very nice. We have a lot of really nice people who work here."

"I had no idea it would happen this soon," onetime FirstTech worker Tom Schmidt tweeted on Wednesday. "But I honestly thought it was inevitable."

Evans attributes FirstTech's demise to market forces, including shrinking hardware margins amid competition from a growing number of aggressive national vendors.

These vendors have "basically been willing to sell the computer equipment below cost to go after the national service business," he noted. It became increasingly difficult for "a brick-and-mortar to offer personalized service when we can't make any money off the product you're selling.

"It has been a dramatic change in that regard, the last couple of years in particular," Evans said.

Apple Inc. itself does not heavily discount its products, but it recently loosened restrictions on how low its gear can be sold. This created pressure for FirstTech, he said.

FirstTech, which marked its 35th anniversary in 2012, weathered hit after hit as it fought to stay in business over the decades.

The recent national economic downturn ate alarmingly into profits. Even so, it managed to avoid laying off any of its 55 employees, or cutting their salaries. FirstTech now has 75 staffers.

Prior to that, Apple became as much a retail adversary to FirstTech as an ally, unveiling five of its own Twin Cities stores, including one in 2010 just blocks from FirstTech on Hennepin Avenue.

This inevitably sapped some of FirstTech's vitality. When hot new Apple products went on sale amid hoopla, for instance, Apple stores typically received ample shipments, while FirstTech got paltrier allotments. As a result, FirstTech did not see the lengthy queues for those shiny iPhones and iPads that the Apple outlets typically drew.

FirstTech, unable to compete with Apple's glitzy retail outposts, tried complementing Apple in the Twin Cities instead of replicating it. Last year, it opened a branch store in Rochester, Minn., where Apple retail doesn't have a presence. That store closed Wednesday.

It diversified into education- technology products, such as classroom sound systems and interactive whiteboards. It emphasized tech training and consulting, for schools as well as small and medium-size businesses, with staffers often assigned semi-permanently to clients for tech maintenance and troubleshooting.

FirstTech would even set up Microsoft Windows-based servers for clients if so requested.

Relations between FirstTech and Apple remained friendly and productive, Evans insisted.

FirstTech did a brisk business in repair, maintenance and sale of older Macintosh models that Apple outlets were loath to touch, and Apple referred such business to FirstTech, he noted.

FirstTech also found itself on unsteady ground in the 1990s, as Apple fought for survival prior to the return of its long-exiled founder Steve Jobs and a renaissance that became a business-world legend.

FirstTech, though, predates Apple, operated under various monikers by two generations of the Zuckman clan since 1941. Over the course of its history, it offered radios, televisions, phonographs and other kind of pre-digital consumer electronics.

FirstTech has recently been owned and run by brothers Arnie, Rick and Harvey Zuckman.

The company's entry into the Apple business is legend.

Apple was so new to computer selling, it did not have its own paperwork for consummating deals, Evans said. So FirstTech grabbed one of its older contracts, removed the customer name from it and added Apple's name.

Pete Paulsen, who sold the company's first computer shortly afterward, went on to become FirstTech's general manager and co-owner.

"The person who bought that first Apple II also bought our first Lisa (computer) and our first Macintosh," Evans said. "To this day, he is still our customer."